The number of jobs created in London’s banking sector has risen steeply compared to the same period last year as banks invest in digital opportunities.
But banks, traditionally seen as the best place to work for IT professionals, face stiff competition from small financial technology (fintech) companies.
According to research from recruitment company Astbury Marsden, October this year saw 46% more people hired by banks in London than in the same month last year.
It said 3,400 jobs were created in October, compared to 2,330 in October last year. This increase was driven by renewed investment by banks in digital technology for cost savings, improved performance and to help them meet industry regulations.
Astbuty Marsden said the increased use of mobile services in retail banking is the most visible sign of efficiencies that are being delivered by IT investment but added that similar operational improvements are being made in investment banking.
Improvements in investment banking include the integration of collateral management across business units, continued digitisation of business processes, and improved real-time assessment of the risk.
More on banks
Adam Jackson, director at Astbury Marsden, said there has been a change in how firms view investment in IT over the last year: “Investment in IT is no longer being seen as a cost but as a key to unlocking better long term profitability for the sector.”
“From investment banking through to the insurance sector, investment in IT seems to be back in vogue.”
He added that regulatory deadlines are also fueling IT hiring: "They have forced investment banks to undergo a wholesale restructuring which will not be completed for several years. Major challenges include the ring-fencing of investment banking from retail banking, where final delivery is not until 2019, but which is already demanding substantial resources just for the planning stage.”
But banks face competition for the best staff, according to Astbury Marsden, with examples of investment banks having to replace talented technology staff that are leaving the banks to join smallerfFintech companies.
“As well as offering potentially lucrative stock options these fintech companies offer the opportunity to develop new programmes and technologies from the ground-up,” said Marsden.
“We’re already seeing the smaller fintech companies snapping up some of the best technology staff from the investment banks. Banks do not just have to compete with their peers for these staff but also have to find a way to make the roles they have to offer more attractive than those opportunities being created by this new breed of start-ups.”
Read more on IT for financial services
Fintech Pledge launched to strengthen UK’s financial technology sector
Traditional banks need to do more than gloss over back-end systems with fintech paint
Latest UK fintech investment figures reflect the evolution of the sector
Banks already looking for EU-based IT staff for post-Brexit operations